Wise Giving: How to Find the Perfect Charity

Danielle Sonnenberg

	Russian Relief
	Photo courtesy of AmeriCares

Nonprofit relief organization AmeriCares was founded in 1982 by businessman Robert Macauley, after he had embarked on two large philanthropic missions: rescuing a group of Vietnamese orphans after a plane crash in 1975 and bringing millions of dollars of health care supplies into Poland in 1981.

Twenty-five years later, it is still giving. AmeriCares has given away more than $6 billion worth of aid, in the form of life-saving medicine, medical supplies and relief, to people in 137 countries around the globe.

Curtis Welling, CEO of AmeriCares, knows that this nonprofit organization is particularly appealing to members of the financial community. "They understand the key terms, including leverage and value-added proposition," says Welling.

"Somebody gives us a dollar, and we can turn [it] into $30 or $40 of aid. So from an investment standpoint, it's a leveraged pay on your philanthropy. You get to see your dollar work 30 times as hard," Welling explains.

Choosing a Charity

Not surprisingly, the most intelligent and aggressive charity donors want to know where their money is going.

There are several companies acting as watchdog services to give benefactors information on how their donation is used. Charity Navigator, for instance, was founded in 2001 and has information on over 5,000 charities.

Its Web site judges charities in the areas of organizational efficiency and organizational capacity. Each organization receives a score in each area and an overall rating.

The efficiency rating looks at four factors: fundraising expenses, fundraising efficiency, program expenses and administrative expenses.

The capacity rating is based upon the organization's average annual growth of primary revenue, average annual growth of program expenses and working capital ratio (which analyzes how long a charity could sustain its current level of giving using its current capital).

AmeriCares, for example, was rated 39.92 on a scale of 40 for efficiency and 22.50 on a scale of 30 for capacity.

Inside AmeriCare

The structure for AmeriCares' funding is complex, as it's such a large organization.

It has three stakeholders: financial donors (individual and corporations), in-kind donors (companies that provide services or products) and country partners (AmeriCares implements programs in countries around the world). In-kind donors include many Big Pharma players. "They have a big stake in corporate responsibility. They do it for many reasons, including public relations. We're the means to which they can implement their charity," Welling explains.

"Nonprofits either create programs, or ... find programs [to] work with to make it stronger," says Welling. Considering its worldwide reach, AmeriCares primarily does the latter.

AmeriCares works directly with drug companies. Pfizer(PFE Quote), for instance, donated $530 million of its drug Zithromax to help cure trachoma, an infection of the eye. Left untreated, the infection can eventually lead to blindness. Eight million people are visually impaired or irreversibly blind as a result of trachoma, and Pfizer's program has been implemented in some of hardest-hit areas of Senegal, Mali, Niger and Ethiopia.

To view Alix Steel's video take of today's Good Life segment, click here.

Rich Sources

The Internet has also been extremely helpful in attracting contributions, especially from younger donors.

"Particularly in [major] disasters, this can be seen. In the [2004 Indian Ocean] tsunami, there were approximately 100,000 donors; 28.8% of the donations were received online," says Welling.

The next generation of donors will be electronic. "We can send information with greater impact; it is more immediate and at no cost," Welling says, referring to AmeriCares' Internet-based donations.

To celebrate its 25th anniversary and tap into a lucrative donor base, AmeriCares is also holding a glamorous event at Cipriani, a high-end restaurant in downtown Manhattan.

Approximately 1,000 people are expected to show up for the star-studded, black-tie gala, including former President George H.W. and Barbara Bush (long-time friends of the founders, the Macauleys), author and Nobel Peace Prize laureate Elie Wiesel, Rwandan hero Paul Rusesabagina (the inspiration for the movie Hotel Rwanda) and concert pianist Jon Kimura Parker.

The event has also attracted big corporate names, including Goldman Sachs (GS Quote), Altria (MO Quote), MetLife (MET Quote) and John Hancock (JHFT Quote).

No, it's not all about the partying. "We are hoping to raise $1 million to $1.5 million," from the evening, says Welling.

There are several ways for interested parties to contribute: $100,000 will buy you a visionary table, which gives sitting for 10 guests, a private reception for 10 with the Bushes and a Web site listing; $25,000 will give you an ambassador table for 10 guests, a private reception for up to four guests with the Bushes and a full-page acknowledgement in the program. Remember, all this money is going to a good place.

Donating to a nonprofit is similar to making an investment. You want to do your research and know whom you are giving it to and how much your investment will increase over time.

So when you're considering a charitable investment, make sure you do a thorough analysis first. You'll be much more likely to put your money in the right hands.

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